Online gaming has been around for a while, yet it managed to stay off the radar of regulators. Revelations in the latest money laundering and terror financing cases have compelled competent authorities to bring the gaming industry inside the regulatory fold.
The regulatory guidelines are neither to undermine the know Your business of online gaming fraud establishments nor to spoil user experience in the process. Prevention of financial crimes through strict know your player compliance will ensure that the industry stays open for legit players and see growth in the foreseeable future.
There is a misconception in the online gaming industry that players are hostile toward compliance practices because it spoils user experience. In reality, the interests of both players and companies perfectly align in the current scenario which we will further elucidate in the following sections.
The online gaming industry has seen a host of regulatory reforms in the last couple of years. Before that, there were no stringent laws and procedures, internally and externally, to ensure only legitimate players with legitimate means invest for recreation.
These days, the online gaming industry has grabbed the attention of several regulatory bodies such as FATF and the UK Gambling Commission. The regulations are not intended to hamper the growth but rather ensure it through transparent KYC and AML practices.
There is no denying that these laws can be hard to abide by sometimes, but they ensure the cyber security of the players by keeping malicious actors outside the arena for more details click here volokit
Before the onset of regulatory reforms, there were no stringent security checks for minors in the online gaming world. This exposed people under the legal age to a type of content that was often inappropriate for them. There were a plethora of cases related to the online gaming sphere including financial fraud, identity theft, etc.
This put a black mark on the reputation of online gaming. Through rigorous know your player practices, online venues can ensure the type of content and a commensurate financial threshold for minors. Again, this will boost players’ confidence in the industry which has great potential for gains through this trust.
Sometimes, regulatory measures on a broad level are not enough to enforce compliance and best practices. In such cases, national initiatives for know your player and online identity verification for online gaming are steps in the right direction. Both the players and the gaming companies will be at ease knowing that the person on the other side of the screen is not a crook wanting to clean his dirty money.
One such case is the restrictions imposed by KJM, a German version of the UK Gaming Commission, in a treaty to augment current gaming KYC and AML compliance in 16 German states.
Under this treaty;
- Sanctioned players and minors will not be subject to general identification and authentication methods.
- A monthly 1,000 Euro spending limit with no room for house credit.
- Gaming entities are bound to practice social responsibility.
With these reinforcements in place, the gaming industry has a structural rigidity that only allows legitimate players to play.
Incentives are a great way to get a new client base. You give them a taste of something new for free, or at a discounted rate, and then they come for more. This can sum up the story of online gaming. But, often scammers and hackers are behind those advertisements promising to deliver the best experience. Only they disappear in the oblivion of the online world without leaving any visible trace.
According to FTC records, the commission received around 4.8 million identity theft cases and fraud complaints in 2020.
When an online gaming company has an elaborate security plan for identity theft protection in place, it gives the players a true sense of security. They know their credentials and personal information is safe and will not fall in the hands of shady people who can exploit them for some bucks.
Often, there is a trade-off between the know your player compliance and the player experience with the portal.
One thing is sure, the regime of stringent laws and regulations for KYC and AML in gaming is just getting started. As the new cases and loopholes in the system will be unearthed, regulatory bodies will take more rigorous actions against the non-compliant entities. The current KYC and AML compliance scenario has Artificial Intelligence and Machine Learning at its helm. These systems are more capable than Human Intelligence alone to process large chunks of data for client authentication and Face verification purposes.
The future calls for automation to streamline regulatory compliance and an enhanced user experience. Both combined will ensure that the online gaming industry thrives with real and legitimate users playing in the arena.
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